2017 (7) TMI 745 - HC - Income Tax

Tax appeal admitted for consideration of following substantial question of law Whether the Appellate Tribunal was right in treating business income of ₹ 2,31,17,992/- as Short Term Capital Gain and ₹ 11,27,984/- as Long Term Capital Gain and ₹ 11,12,073/- as Long Term Capital Loss? Disallowances of interest - Held that - Tribunal noted that the advances were made by the assessee to one Kanak Castor Products Private Limited. Kanak Castor was declared as the highest bidder for purchase of assets of a company in liquidation by the Gujarat High Court. To facilitate the purchase, the assessee had also purchased 4.79 crores shares out of 5 crores shares of the company i.e. Kanak Castor. The Tribunal, therefore, found that such advances were made for the purpose of business. We do not find any error in the view of the Tribunal. This question is, therefore, not considered.

Summary

The Gujarat High Court admitted a tax appeal to consider if the Appellate Tribunal correctly treated certain income as Short Term Capital Gain and Long Term Capital Gain/Loss. The revenue also questioned the deletion of interest disallowances, but the Tribunal found the advances were made for business purposes and upheld the deletion.